Stanislaus Surgical Hospital/Sutter Health
The assignment was to assist the Tru Medical Partners real estate holding entity in evaluating the impact on the real estate valuation of the hospital and medical office building upon conclusion of a proposed sale of the hospital operating company to a Sutter Health System-affiliated entity.
The minority interest, physician partners, of the hospital operating company were approached by Sutter Health System to sell an operating interest in the hospital operating company. The partnership recognized that with reimbursements shrinking for smaller hospital operators, affiliating themselves with a system like Sutter Health would be advantageous to the operation.
As negotiations between the physician partners, Tru Medical Partners and Sutter Health progressed, the Healthcare Net Lease Group of Stan Johnson Company was asked to advise the real estate ownership regarding lease terms, credit of the proposed tenant, and the resulting effect these changes would have on the real estate value.
As the sale of the operating entity neared completion, the real estate partnership engaged the Healthcare Net Lease Group to conduct a discrete sale process and identify prospective buyers for the real estate assets. Because of their exclusive focus on the sale of healthcare leased real estate, the Healthcare Net Lease Group was aware of several buyers in the market with urgent requirements to place capital into healthcare-leased projects. After presenting the property to this select handful of buyers, and discussing the qualifications of these buyers with the seller, a private REIT rose to the top as the most qualified. Terms of the real estate sale were fluid as the sale of the operating company progressed and terms of the lease changed during the due diligence period. This also provided the buyer with an opportunity to have a say in the negotiated lease terms. For six months, the entities worked together, finalizing the deal terms for the lease in conjunction with the sale of the hospital operating company. Throughout the entire time and process, the Healthcare Net Lease Group assisted the parties in underwriting and executing the deal.